Golden Ltd is a mining company based in Western Australia. Recently they have found evidence of significant gold deposits in the Australian outback. To determine whether it is viable to mine those deposits, Golden has dug up significant areas of protected indigenous land. They have been sued by the local indigenous community as this land was sacred to their beliefs and had artifacts dating back a few thousand years. Goldens lawyers, have indicated that while they will defend the actions of their client, it is expected that Golden will lose the case and will have to pay damages to the local community. However, given the publicity the case has received the lawyers are unable to reach an agreement on the amount of the damages.

Required:

Should Golden Ltd recognize a liability and an expense for this event? Justify your answer by reference to the definition and recognition criteria as per the Conceptual Framework.